Strategic Planning - Step by Step for Success

June 27, 2012 - Trey Maust

Your mission statement is solid. You’ve worked with your management team and advisors to develop a vision for the future that’s ambitious, but not a pie-in-the-sky impossibility. Now, how do you translate that vision into real-world success? Strategic planning lets you bring method – and intention – to the process of realizing your vision.

Understand the Landscape

Each year, we begin our strategic planning process with a comprehensive overview of the broader landscape in which we operate the bank. For us, this involves understanding long- and short-term trends in the economy, the financial services industry, capital markets, demographics, competition, etc., both nationally and locally. I always ask the question, “What do we need to understand about the environment in which we operate in order to effectively plan for the next three to five years?” That helps frame the data that’s needed to get everyone on the same page when we hold strategic planning discussions.

Explore the Possibilities

A SWOT analysis is a helpful exercise to brainstorm dangers and opportunities that should be considered in our analysis—with the ultimate goal being to whittle down to a few select initiatives that will move the company forward over the next year. As a reminder, SWOT stands for (S) internal strengths of the company, (W) internal weaknesses, (O) opportunities that can be capitalized on, and (T) threats that may prevent the company from achieving its goals. Working through a SWOT or similar exercise helps get everyone on the same page as to the company’s internal resources (i.e., strengths and weaknesses) and external factors impacting success (i.e., opportunities and threats).

Set the Course

Most of the strategic initiatives we focus on during an upcoming year were derived from the SWOT exercise. The results of the SWOT are rarely a complete surprise, but breaking everything out into these four categories really helps clarify the three to five initiatives we want to make substantial progress on over the next year.

We’ve also found that it works best to focus on three to five initiatives, because if you don’t have at least two or three significant initiatives to focus on, you may be aiming too low – and if you have more than five, you probably aren’t being realistic about what’s really achievable for your company.

For each initiative, we always identify a measurable target. What will success look like? Does success mean doubling revenue in five years? Does it mean improving profit margin by 20 percent in the next twelve months? Is it developing a written career or professional development plan for each employee by December? Whatever success is for you, distill it down to something that is measurable.

Be Resourceful

Having identified the three to five key strategic initiatives and their measurable targets, we always reduce these to quarterly goals by asking “How can we chip away at the annual targets during the next quarter? And just as important, who will own the success – or failure – of each quarterly initiative?” At the bank, we establish three measurable targets to be achieved by the end of the quarter for each of the key strategic initiatives. Each has a champion assigned to it. Tackling an annual goal can oftentimes be too overwhelming, or be put off until the month before it’s due. Breaking it down into small quarterly successes means it’s more likely to be achieved and much easier to track progress.

Put these quarterly objectives into an easy-to-read document that you can share with your management team and your board, so everyone can easily understand your strategy and how you plan to implement it.

Review the Progress

Make sure you assess progress every quarter. We have found color-coding – green, yellow and red in our case – is really helpful to visually indicate progress.

Ask yourself, have you achieved all of this quarter’s objectives? If not, where did you fall short – and why? What can you learn from your failures, and how can you apply those lessons moving forward? If an objective was missed, does that mean you need to readjust your strategic plan? Or did you set your sights on an objective that didn’t make sense to start with?

· Is the company still pointed toward that vision? Or has it veered off-course?
· Is our vision still the right one?
· What actions can we take to get back on track?
· Are we moving quickly enough? Too quickly? What can we do to improve our pacing?

Quarterly appraisals not only help you adjust your plans, they also allow you the satisfaction of seeing how far you’ve come. It’s a reward for your intentional effort – and that reward can go a long way towards fueling your efforts as you begin to work on next quarter’s goals.